Festive season airfares set to soar as oil marketing companies hike jet fuel prices

The prices of Aviation Turbine Fuel (ATF), commonly known as jet fuel, have soared to their highest point since December 2022. Oil marketing companies (OMCs) on Friday implemented a substantial 14% increase in jet fuel prices, pushing them to ₹1.12 lakh per kiloliter in Delhi.

This decision is anticipated to have a cascading effect on air travel costs, potentially making flights more expensive, particularly during the upcoming festive season. This latest surge marks a significant 24% rise over just the past two months.

According to a price notification issued by state-owned fuel retailers, the ATF price as of September 1st has shot up to ₹20,295.2 per kiloliter, crossing the notable ₹1.12 lakh mark. Specifically, the cost of aviation fuel in Delhi has now surged to ₹1,12,419.33 per kiloliter.

This upward revision in jet fuel rates by oil companies constitutes the third consecutive increase in recent times. In August, the ATF price witnessed an aggressive 8.5% hike, with the cost soaring by ₹7,728.38 per kiloliter to reach ₹98,508.26 per kl in the national capital. Furthermore, a 1.65% increase was observed in July, translating to ₹1,476.79 per kl.

The surge in global crude oil prices has been a key factor influencing the rise in jet fuel prices worldwide, prompting the OMCs to make corresponding adjustments to ATF rates. Notably, state-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) have been revising ATF prices on the first day of each month. These revisions are based on the average international price recorded in the preceding month.

While the hike in jet fuel prices has raised concerns over potential flight ticket cost increases, it is worth mentioning that oil companies have recently taken measures to reduce the prices of both domestic and commercial LPG gas cylinders.

The central government implemented a ₹200 reduction in the price of domestic LPG cylinders as a gesture on the occasion of Raksha Bandhan. In tandem with this, OMCs have lowered the price of 19 kg commercial LPG gas cylinders by ₹158, setting the new price at ₹1,522.

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